KUALA LUMPUR (Dec 5): Genting Bhd (KL:GENTING) said the group is establishing an unrated medium-term notes (MTN) programme of up to RM5 billion in nominal value, with the first series used to partly finance the takeover offer for Genting Malaysia Bhd (KL:GENM).

Genting's wholly-owned subsidiary Genting Vista Bhd lodged the programme with the Securities Commission Malaysia (SC) on Friday, according to the conglomerate’s filing with Bursa Malaysia. 

The programme will have a perpetual tenure, while each MTN issuance will carry a minimum tenure of one year. The coupon rate for each tranche will be fixed or floating, to be determined prior to issuance.

Genting said proceeds raised under the programme will be used, among others, for the group’s operating expenses and refinancing of borrowings, including the buy-back or early redemption of existing debt securities.  They will also be used to fund investments and capital expenditure, as well as working capital needs.

“The proceeds from the first series of MTN under the programme are expected to be utilised to refinance the medium-term notes previously issued by Genting RMTN Bhd, a wholly-owned subsidiary of Genting, to part-finance the acquisition of ordinary shares in GENM pursuant to the takeover offer,” the group added.

Genting on Friday also announced that Genting RMTN has issued its eighth tranche, amounting to RM1.35 billion, under a separate MTCN programme with an aggregate nominal value of RM10 billion.

The notes were issued at par with a one-year tenure and carry an interest rate of one-month KLIBOR + 1.80%. Net proceeds from this issuance will likewise be used to part-finance Genting’s mandatory takeover offer for the remaining shares in GENM.

Genting’s RM2.35-per-share privatisation offer for GENM closed on Dec 1 with the group securing 73.133% of GENM’s shares (with another 0.202% of acceptances still pending validation at the time of the announcement) — short of the 75% threshold required to withdraw the company’s listing status. As such, GENM will remain listed on Bursa Malaysia.

The corporate developments come on the heels of GENM's major regulatory win of a casino licence tender for its flagship Resorts World Genting operations, announced earlier this week.

Affin Hwang Investment Bank Bhd and AmInvestment Bank Bhd are the joint principal advisers and joint lead arrangers for the RM5 billion MTN programme, as well as the joint lead managers for the latest tranche issuance under the RM10 billion programme.

Shares in Genting closed two sen or 0.61% lower at RM3.25 on Friday, valuing the group at RM12.60 billion. Year to date, the counter is down more than 15%.

Meanwhile, GENM rose three sen or 1.38% to RM2.20, giving it a market capitalisation of RM13.06 billion. Year to date, GENM is down about 2%.